Bullish pennant breakout and gold cross on 1-hour chart point to further gains

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  • GBP / USD is targeting a breakout above 1.3200 amid Brexit optimism.
  • Breakout of a bullish pennant and a gold cross are confirmed on the 1 hour chart.
  • The RSI on the 1 hour chart remains bullish still below the overbought region.

Amid the official resumption of Brexit negotiations and hopes for a possible mid-November deal, the GBP / USD rallied strongly on Wednesday.

The pair reached fresh six-week highs at 1.3178 before correcting towards 1.3100 on Thursday. At time of writing, the pair is virtually unchanged on the day near 1.3130, poised for a further rally towards the 1.3200 level amid a bullish technical setup.

GBP / USD has confirmed the breakout of a bullish pennant, as well as a golden cross, on the 1 hour chart, opening the doors for a test of levels above 1.3300.

On their trip to the upside, GBP bulls could face an initial hurdle at Wednesday’s high of 1.3178, above which the psychological level of 1.3200 could be tested.

The RSI on the 1 hour chart remains in the bullish zone at 66.67, allowing the further rise.

On the other hand, the upward sloping 21 hour moving average at 1.3131 is likely to offer immediate support.

The pattern is likely to be invalidated if the price closes below the support of the downtrend line, now at 1.3119. The next support on the downside is at the 50 hourly moving average at 1.3034.

Still, the path of least resistance is to the upside.

GBP / USD 1 hour chart


Credits: Forex Street

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